MFS builds out European fiber-optic networks

Feb 1st, 1997

MFS builds out European fiber-optic networks

BEN HARRISON

Another piece of a Pan-European network has fallen into place for MFS Communications Co. Inc. (MFS), Omaha, NE, with its receipt of a license to build and operate a fiber-optic telecommunications system in France. Currently, MFS operates a fiber-optic network in Paris that provides communications services to a closed user group.

This license permits MFS to offer a broader range of services to a wider market and to carry telecommunications traffic across national borders over its own infrastructure.

Colin Williams, president of MFS International, an operating subsidiary, says, "The company has licenses to build and operate facilities-based international fiber networks in The Netherlands, Germany, Sweden, and now in France." (For MFS`s new licensing agreement in the U.K., see "U.K. license goes to MFS," this page.)

The French license was awarded to MFS by the French Ministry for Post and Telecommunications. Minister Francois Fillon said the license was made possible following the law passed in July 1996, which ended France Telecom`s monopoly in the supply of fixed telecommunications infrastructure. Sources at France Telecom indicate that they welcome competition in the nation`s telecommunications market.

Traver Kennedy, director of wide area network research worldwide for the Aberdeen Group in Boston, observes, "By licensing MFS, France is taking a step toward the tangible gains enjoyed by a competitive telecom marketplace. The latest advanced digital services provided by a new entrant can deliver a new benchmark for carrier price-performance."

Kennedy cautions, however, "The world is watching to see if Minister Fillon will take the next step by being vigilant in enforcing the interconnects and structural changes required to deliver the full benefit of competition to French business and public interests."

Moreover, he says, "MFS`s market-driven strategy and service will continue to pay off as deregulation opens up markets around the world. The company is leveraging its skills as a network builder, integrator, services supplier, and management organization to bring added value to communications markets."

Rob Frieden, associate professor of telecommunications at Pennsylvania State University in State College, PA, echoes Kennedy`s concerns about the intent of the French government and France Telecom to create a truly competitive telecommunications environment.

"The terms and conditions of the interconnection between France Telecom and MFS have yet to be resolved," Frieden says. "France Telecom`s statement about welcoming competition should be taken with a grain of salt. France Telecom regards MFS and other potential competitors as `cream skimmers` and `cherry pickers.`

"There are parallels in the United States with competition between AT&T and MCI. However, fiber network facilities-based competition brings out the best conditions for the communications industry and business," Frieden suggests.

Charles Steinfield, a faculty member in Michigan State University`s Department of Telecommunication, notes, "MFS has been aggressively seeking permission to build fiber networks in the major cities of Europe, and they are clearly benefiting from the European Union`s recent directive to member states to allow alternative telecommunications infrastructures."

Steinfield says it is important to examine specifics of the license however, to see whether it contains language that requires MFS to build out and make its services accessible throughout France, or, if they are confined to the Paris metropolitan area.

New cities in operation

In Germany, MFS`s German subsidiary has been awarded a license by the German Ministry of Post and Telecommunications to build and operate a fiber-optic network in and between the cities of Berlin, Dusseldorf, Frankfurt, Hamburg, Cologne, Munich, and Stuttgart.

MFS has operated in Frankfurt since 1994. In 1995, it completed a fiber-optic network in that city that represents the first alternative, private metropolitan area network in the country. The company is also beginning to provide international telecommunications to customers in Amsterdam and Milan. MFS networks operate in London, Paris, and Stockholm, and the company manages international telecommunications nodes in Zurich and Hong Kong.

MFS`s Williams comments that the company`s goal is to provide business customers with end-to-end managed communications over a seamless global network owned and operated by a single company.

In Amsterdam, the company has completed the build-out of its international node, and installation of a large voice switch is nearing completion. Last year, MFS was awarded a license enabling it to build and operate a regional network in The Netherlands.

This license also permitted the construction and operation of cross-border networks. MFS has concluded negotiations with the Amsterdam officials for rights-of-way and has begun construction of the city network, which is scheduled to be in service early this year.

In Milan, MFS is providing telecommunications services to Italian customers. The company has an office in Italy, following the acquisition of ecs-tel, Milan, which supplies special telecommunications services to Italy`s institutional finance industry. MFS has installed its own city network node and is migrating ecs-tel`s international customers to the MFS integrated global network. q

U.K. License Goes to MFS

MFS Communications Ltd., London, has received an international facilities license from the United Kingdom`s Department of Trade and Industry. This license expands the company`s position from a regulatory standpoint to meet customer demand for end-to-end owned and managed transatlantic and Pan-European networks.

According to James O. Crowe, chairman and chief executive of MFS, "This breakthrough represents the final barrier to full competition in the U.K. market. Moreover, this license gives added momentum to the telecom reform that is sweeping through Europe."

He adds, "With the key regulatory pieces falling into place across Europe and the United States, the strategic value of our merger with WorldCom Inc. becomes even more compelling."

Previously, MFS announced that it is in a partnership to build and operate a Synchronous Digital Hierarchy 10-Gbit/sec transatlantic cable system between London and New York (see Lightwave, January 1997, page 1). The cable system is planned to be ready, on schedule, for service in the first quarter of 1998. The United Kingdom and the United States are the world`s leading telecommunications hubs. By linking the two countries with a new high-capacity network, MFS will have in place the strategic element of a telecommunications network designed to meet the rapidly expanding needs of the company`s multinational business customers.

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